On January 20 BHP Billiton (BHP) announced that second-quarter iron ore output rose 11% to a new record on heavy demand from China. The company also reported increased production of petroleum, zinc, diamonds, and nickel. Production of coking coal, uranium, and copper declined.
Continuing the shift in how prices are set on the global iron ore market, BHP Billiton said that 46% of its iron ore shipments from Western Australia were sold at market rates. Prior to the breakdown of negotiations between iron ore producers and China in 2009, most ore was sold at prices determined during annual negotiations for annual contracts between the producers and steel makers in Japan, Korea, and China. In July the company reported that 30% of its iron ore production was at market rates. In 2009 market spot prices for iron ore averaged 90% above the $61 a metric ton negotiated with Japanese and Korean steelmakers for 2009-2010.